An Australian economist who predicted the 2008 financial crisis now says another crash is “almost inevitable.”
Steve Keen heads the economics department at Kingston University in London. He was one of the few academics to anticipate the subprime housing crisis. On his advice, French investment bank BNP Paribas announced it was shutting down three investment funds specializing in the US subprime market in 2007. At the time, the bank said it was struggling to calculate their values against a backdrop of growing concerns over liquidity.
In an interview on RT’s Keiser Report, Keen said another crisis is around the corner, and the problem this time is debt.
Gold hit two-month highs this week as investors seek safe-haven amidst increasing geopolitical tensions. Pres. Trump promised “fire and fury” if North Korea continues its threatening posture. Meanwhile, relations with Russia continue to deteriorate.
During an interview on RT, Peter Schiff said world tensions and the weak dollar should be playing an even larger role in pushing up the price of gold than they have been. Given the dollar has tanked this year, gold has really not strengthened very much. But Peter went on to say he thinks people will begin to embrace gold – although not for the reasons you might think. He didn’t focus on the current geopolitical brouhaha now in the news cycle, but instead emphasized we should be watching the Federal Reserve and central bank policy.
For the last several weeks, Peter Schiff has been saying President Trump is making a mistake by taking credit for the surging stock market because fundamentals don’t support the bull run. He’s warned that the president has set himself up and the Federal Reserve will use him as the fall-guy when the inevitable crash comes.
On Tuesday, Peter took the message onto Fox Business and faced off against former Trump campaign operative Steve Cortes. Fireworks erupted when Peter said Trump looks like a hypocrite when he tries to take credit for an improving economy.
Debt in the US is the mother of all bubbles.
The US government is more than $20 trillion in debt, with actual unfunded liabilities pushing far higher. Meanwhile, American families have amassed more than $1 trillion in credit card debt alone.
During a speech at Cambridge House IMWC earlier this summer, Peter Schiff discussed the massive levels of government, corporate, and personal debt in the US and how it will eventually take the air out of America’s bubble economy.
Peter starts the speech by showing the economy isn’t nearly as great as the mainstream pundits claim. He highlights the massive levels of debt, how the government manipulates employment numbers, and the very real problem of inflation. Then he shows how Federal Reserve policy has gotten us into this predicament and the choice it will ultimately be forced to make. Peter says in the end, the Fed will sacrifice the dollar.
During last week’s Federal Reserve Open Market Committee meeting, the central bank announced it would leave interest rates unchanged.
The announcement didn’t come as a surprise. With inflation weaker than expected in recent months, analysts widely expected the Fed to hold pat on rates. But Yellen and company did say they plan to begin shrinking the central bank’s balance sheet soon, a sign they want to remain on the path to “normalization.”
This raises a question: why now? Objectively speaking, the economy isn’t currently any stronger than it was a couple of years ago. It might even be weaker. Peter Schiff addressed this during a recent interview on RT’s Boom Bust. He said he thinks it’s because now the Fed has a fall-guy in Donald Trump.
Last month, Federal Reserve chair Janet Yellen made a bold prediction, saying an economic meltdown like the one we saw in 2008 will not likely happen again “in our lifetime,” because banks are “very much stronger.”
Ron Paul begs to differ.
In fact, during an interview on World Alternative Media, the former congressman said Yellen’s comments should probably make us more than a little nervous because, “central bankers are always wrong on their predictions – especially before a bust.”
What she says shouldn’t reassure anybody.”
In his Gold Videocast last week, Peter Schiff made the case that silver is extremely undervalued, especially when compared with gold.
In a recent interview with Neil Cavuto on Fox Business, CME Group Chairman Terry Duffy says gold is undervalued as well. He said he believes realistically, gold should be at $5,000 to $6,000 per ounce.
And at some point, the price will catch up with reality.
During a recent podcast, Peter Schiff explained that rising interest rates aren’t necessarily bad for gold. He also talked about how weakness in the Japanese yen might put some downward pressure on the price of gold in the short-term, but eventually, it’s going to be good for the yellow metal.
Peter hit on that themes again in an interview on RT’s Boom Bust, saying he thinks gold is going to be the last safe haven standing.
During the recent interview at International Metal Writers Conference, Peter Schiff said we are in the eye of an economic hurricane right now. Investors need to take advantage of the relative calm and buy gold.
But many Americans who typically invest in gold have been lulled into a false sense of security with the election of Donald Trump. Peter said that’s a mistake. Despite his intentions, Trump won’t be able to change the course we’re already on.
In April, Marc Faber called the US economy terminally sick and predicted a 20 to 40% crash in the stock market. In a recent interview on CNBC’s Trading Nations, “Dr. Doom” reiterated that US stock markets are overvalued and that there will eventually be a “massive” deflation in asset prices.